75% Alternative Mutual Funds Liquidated Since 2015 Signals Industry Shift

Several fund sectors have experienced significant challenges recently, with healthcare and infrastructure among the worst performers over the past five years. The IA Healthcare sector, impacted by US President Donald Trump's policies such as tariff increases, drug price reductions, and Medicaid cuts, has returned only about 4%, making it the second-worst equity sector after China/Greater China. Despite these difficulties, some funds like Polar Capital Healthcare Opportunities have outperformed, delivering returns around 30%. Meanwhile, many alternative mutual funds have faced a high failure rate, with 75% liquidated or merged since 2015, highlighting the risks and complexity of such investments despite ongoing efforts to democratize private market exposure. In 2024, some equity funds lost money but have rebounded strongly in 2025, driven by improved inflation outlooks and rate cut expectations; for instance, WS Amati Strategic Metals delivered a near 50% return year-to-date after a poor 2024 performance. Additionally, thematic and sectoral mutual funds, particularly in technology, have seen steep NAV drops recently, reminding investors of the volatility and sector concentration risks involved in these funds.